Commercial

05/26/2015    Volume 15, V

The one thing I think Most would agree is that the one constant thing in this universe is change. Now don’t fret, it’s a good thing; well, most of time anyway. What if we were still watching black & white TV’S, and listening to eight tracks? Ayah! You kind of like the change now. I Thought so.

Well get ready here it comes again, and it’s not only changing names, but the way it does business. HUD-1 your best days are behind you; Consumer Financial Protection Bureau (CFPB);

August 1, 2015 you’re batting…

The final settlement disclosure is generally a routine exercise for lenders and title agents, but the new rule puts more responsibility on lenders for the precise timing and accuracy of the statement, which must be given to the borrower three days before closing. The new format of the closing disclosure is also very different than the current form, and automated systems have to be updated in the new format.

The new format of the closing disclosure is also very different than the current form, and automated systems have to be updated in the new format.

At issue is a final rule issued by the CFPB in November 2013 that merges the Real Estate Settlement Procedures Act and Truth in Lending Act disclosures requirement into a single document.

Lenders said the adjustment to the new form is difficult. For example, the new closing document lists fees under certain categories but the industry doesn’t have standard definitions for many fees and charges.

“The trouble is that you can have a finance charge that has different names,” Andreano said. “In some cases, the same names may be used to refer to different types of fees, while in other cases different names refer to the same fee. The technology guys are wondering how to deal with that.”

Another problem comes down to the format of the new document. The current HUD-1 settlement sheet has dedicated lines for certain fees and other data, with each line numbered. But the CFPB’s new closure document does not have numbered lines — and it’s causing big problems.

“The problem is how do you set up the systems and how to ensure compliance if you don’t have any way to keep track of the line numbers,” said Rod Alba, senior regulatory counsel of the American Bankers Association.

A spokesman for the CFPB said the agency removed the line numbers from the document after extensive testing with consumers showed it confused many borrowers.

“The testing found consumers were better able to understand the information on the new forms without the line numbers,” the spokesman said.

Michael Gould

(205)902-2283

E21 Realty

100 Concourse Pkwy E Bldg #135

Hoover, Al.35244

www.michaelgouldgroup.com

Twitter-@lmgllc6

“Don’t go into court without a lawyer, or a real estate deal without a REALTOR”